Another reason to avoid annuities.

In addition to very high fees and costs -- even for a so-called low-cost immediate life life annuity, you also need to be worried about whether your insurance salesman is scamming you. Here's the latest in Federal enforcement actions against insurance companies that are defrauding their customers.

The sanction includes a $20 million fine and $5 million to be paid to customers, the Financial Industry Regulatory Authority, or FINRA, said. The fine marks FINRA’s largest related to variable annuities, FINRA said.

“MetLife fully cooperated with the FINRA investigation and we are pleased to put this matter behind us,” a MetLife spokesman said. The company, which neither admitted nor denied FINRA’s charges, has set aside funds to pay the fine, he said.

MetLife’s “annuity switching” business generated at least $152 million in commissions between 2009 and 2014, FINRA said.

MetLife terminated Williamsville, N.Y.-based brokers, Christopher Birli and Patrick Chapin, in 2012, according to regulatory filings. The two had advised State University of New York employees who participated in the school’s retirement plan, according a 2014 FINRA complaint.

Both brokers agreed to be permanently barred from the industry without admitting to nor denying FINRA’s allegations, according to regulatory filings.

So Metlife's annuity switching scam generated $152 million in commissions but only $5 million was actually returned to customers and Metlife paid a $20 million fine to the feckless regulators. These crooks got to keep the other $127 million? And the brokers that were stealing from their customers were never brought to trial, let alone convicted or sent to prison?

As Donald Trump would ask, "Who's negotiating these deals?"

Resources for more information

Rethinking Retirement
Sustainable Withdrawal Rates for New Retirees in 2015, Wade D. Pfau & Wade Dokken. -- You'll have to save a lot more for retirement if a financial advisor and the mutual fund managers he recommends are taking a lot of your wealth in excessive fees. Pfau and Dokken's "research" assume a 1.67% skim rate for stocks, 1.60% for bonds. No wonder our beleaguered retiree is only left with 2%.